Cha Plans To Expand Demolition And Rehab

Details Emerge Of 2001 Project

October 03, 2000|By Evan Osnos, Tribune Staff Writer.

As many as 7 percent of the Chicago Housing Authority's 38,000 public units will be demolished next year, and 1,000 units will be built or renovated under a plan for the first full year of the agency's overhaul.

CHA officials on Monday unveiled a detailed plan for demolition and rebuilding through 2001 and a first sketch of plans for specific sites over the next five years.

Though officials cautioned that plans may change--and demolition could go more slowly than planned--the schedule shows that rebuilding after high-rises are demolished at Robert Taylor Homes, Rockwell Gardens and Stateway Gardens will begin in December 2003.

Dislocated families can choose to receive Section 8 vouchers for short- or long-term housing on the private market or move elsewhere within the CHA. Most people from those notorious high-rises are expected to be shuffled among public buildings, and 700 are projected to use Section 8 certificates next year.

During that time the agency intends to complete 500 new or renovated units in low-rise developments on the South Side, including Wentworth Gardens, Bridgeport Homes and Lowden Homes. Another 500 units will be rehabbed in buildings for seniors.

"All of the rehab work for seniors will be done with as little disruption as possible," Terry Peterson, CHA chief executive officer, said. "They will be moved within buildings while the rehab work is going on."

There are 73 empty CHA buildings, and demolition continues on 10 of them at Robert Taylor Homes and Stateway Gardens. When completed, the $1.6 billion rebuilding project is expected to include 25,000 renovated or rebuilt units in mixed-income developments citywide.

A significant detail in the plan released Monday was a promise that a long-touted but delayed public bond issue will occur next year.

The CHA intends to sell $750 million in bonds to help pay for the 7- to 10-year rebuilding plan. The money will be used to accelerate the work. It will be repaid with federal funds expected from the Department of Housing and Urban Development over the next 10 years.

CHA officials had said in February that they expected to issue the first round of bonds this fall. But that has been pushed back to next spring, acting financial officer Pat Verduzco said.

Peterson acknowledged that the plan offered Monday is based on a bond sale that has not yet occurred and is months from completion. But he said the delay has been a deliberate strategy to ensure that the CHA is adequately prepared and in good financial shape when it faces bond rating agencies that will tell investors whether the CHA is a sound bet.

Highlighting efforts to mop up years of mismanagement and bureaucratic bloat, Peterson said the CHA work force has been slashed by 80 percent since June 1999, reducing the payroll from 2,622 to 546. Most of those positions--police officers, job-training counselors and day-care providers--have been shifted to taxpayer-funded city agencies. Peterson said the moves are aimed at reassuring investors that the agency is committed to fiscal discipline.

One significant piece of housekeeping remains unresolved: a chief financial officer. The agency's former CFO, who is responsible for the bond plan, left five months ago and hasn't been replaced. Peterson said Monday that he "has a candidate coming on board" from the private sector who will be announced by the end of the month.

The CHA has picked three financial advisers to guide the bond process and expects to choose a team of underwriters by the end of the month, Verduzco said.

Next year, and for every year after, CHA expects to receive $139 million in funds from the Department of Housing and Urban Development. Even without the bond issue, that allotment for 2001 is enough to cover the year's costs, Peterson said, including the $85 million needed for demolition.

Despite the delay, bond rating agencies may look favorably on the bond sale if the CHA offers a well-structured proposal, according to Jeff Previdi, the Chicago-based associate director of Standard & Poor's Housing Group.

"Once they have their financing team together I think is where the rubber will hit the road," Previdi said. "How are they going to structure this thing? What is it going to look like? That will drive what their ultimate bond rating will be."